India April-August PP exports, imports surge

06 October 2009 06:54[Source: ICIS news]

By Prema Viswanathan

SINGAPORE (ICIS news)--India’s shipments of polypropylene (PP) surged 50% year on year to 210,000 tonnes in the April-to-August period this year, due mainly to the start-up of Reliance Industries' new export-oriented plant, industry sources said on Tuesday.

The country's imports of the material also tripled to 215,000 tonnes over the same period because of strong domestic demand, they added.

“PP consumption shot up 30% year on year in April-August 2009 to 925,000 tonnes, but this was offset somewhat by additional supply from Reliance’s 900,000 tonne/year PP plant,” said a trader.

Strong PP volumes were imported in April and May before the new Reliance plant achieved stable production, said one source. Supply disruptions due to outages also spurred imports, he said.

The two 450,000 tonne/year lines at Reliance’s new PP plant at Jamnagar in the Gujarat state came on stream in May and June this year. The new plant is located in an special economic zone (SEZ), which offers tax incentives for exports.

Exports of high density polyethylene (HDPE) and linear low density PE (LLDPE), however, fell 75% in April-August to a mere 13,000 tonnes due to strong domestic demand, a source close to a producer said.

India’s HDPE consumption also increased 15% to 540,000 tonnes in the five months ending August 2009, while LLDPE consumption surged 21% to 400,000 tonnes, he added.

“Demand for HDPE and LLDPE from the packaging sector has been very robust in the past few months, while domestic supply has been snug, causing exports to reduce sharply,” said a second trader.

Strong domestic demand caused HDPE imports to surge by around 70% to 460,000 tonnes over the same five-month period, he said.